The FSA has secured a summary judgment in the High Court against land banking company Cityshore Commodities Limited (Cityshore) and its director Aaron Walker.

A summary judgment is a determination made by a court without a full trial.

The judgment confirmed that Cityshore sold land illegally to UK consumers. Mr Justice Peter Smith ordered Cityshore and Walker to make an interim repayment of £200,000 through the FSA, to their victims. They have also been banned for life from selling land by way of business in the UK.

Earlier this year, as part of the same case, a manager of Cityshore, Ashley Cunningham consented to a similar ban and an order requiring her to pay to the FSA sums received by her for her participation in the business.

Cityshore sold plots of land in Grantham, Lincolnshire, to investors on the promise they would make a significant profit when the land ultimately obtained planning permission and was sold on. In fact, the land was in an area which meant it was unlikely to gain planning permission.

Cityshore’s customers were told by the company’s sales staff that they had already applied for planning permission for the land or that they had well-known house-builders lined up to purchase the plots. In reality, Cityshore had no intention of seeking planning permission or helping purchasers sell their land, the FSA ruled.

Cityshore was stopped by an initial injunction obtained by the FSA in January 2011 after the firm had made sales of land totaling over £400,000 at a significant profit.

The FSA does not regulate the sale of land but land banking amounts to collective investment, something that requires FSA authorisation. Cityshore was never authorised by the FSA so its land sales were illegal.

Jonathan Phelan, head of retail enforcement said: “This is a further example of the FSA taking action against unauthorised land banking firms and the individuals behind them.